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1 Marginal costing gives higher net profit as compare to Absorption Costing when:
Produced units < Units sold
Produced units > Units sold
Produced units = Units sold
2 Contribution to sales ratio (C/S ratio) = ?
(Sales - Variable costs of sales) / Gross profit
(Sales - Variable costs of sales) / Fixed cost
(Sales - Variable costs of sales) / Sales
(Sales - Fixed costs of sales) / Sales
3 The production department budgeted the activity level of 100 units of output at the standard cost of $10 per unit. The actual level of output during the period was 120 units at the rate of $9 per unit. What should be the production variance?
$80 favorable variance
$80 unfavorable variance
$1080 unfavorable variance
$1000 favorable variance
4 Which one of the following should be classified as indirect labor?
Workers directly concern with the production in a manufacturing entity
Assembly workers in a factory that manufactures vehicles
Heavy machinery operators in a construction company
Middle mangers in a company producing food products
5 Cost allocation is used rather than cost apportionment when:
Cost can clearly be identifiable with cost centers
Cost can’t be identifiable with cost centers
Specific Cost is supposed to be disturbed among cost centers
Applied cost is higher than the actual cost of production
6 What is the output level at the variable cost’s point of inception on a break-even chart?
Output > Zero
Output < Zero
Output = Zero
None of the above
7 Which of the following is not considered as an item of FOH cost budget
Indirect labor
Material cost that can’t be traceable in a product cost entirely
Direct costs
Management’s salaries expenses
8 Which of the following is true about opportunity cost?
Irrelevant to decisions based upon financial information
Relevant to decisions based upon financial information
Opportunity costs are more or less sunk cost
9 Which of the following is per unit cost of a product?
Fixed cost
Variable cost
Period cost
Average cost
10 Which of the following should be regarded as the inventory of a trading entity (not manufacturing company) ?
Work in process goods
Raw material
Finished goods
Intangible assets


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